# Nonprofit Cash Controls With Volunteers and a Board

- Author: PreciseBankFlow (https://www.precisebankflow.com)
- Published: 2026-07-08
- Updated: 2026-07-08
- Category: Internal controls over cash
- Canonical: https://www.precisebankflow.com/blog/nonprofit-cash-controls

> Nonprofit cash controls for small organizations: volunteers, two-person counts, board oversight and how restricted gifts are tracked to the bank.
Nonprofit cash controls for a small organization rest on four habits: two unrelated people count and record every donation, a second person approves each payment, a board member who is not the treasurer reads the bank statements every month, and restricted gifts are tracked from the pledge to the bank balance so it is spent only as the donor intended.

## Why do nonprofit cash controls fail in small organizations?

Small nonprofits lose money for the same reasons businesses do, plus a few of their own. Duties pile up on one dedicated volunteer, trust replaces checking because everyone knows each other, and the board assumes someone else is watching. Most failures are not a missing policy. They are a policy nobody follows because it feels like an accusation.

### The trusted treasurer

The treasurer of a small charity often opens the mail, makes deposits, writes checks, keeps the books and prepares the report to the board. Nobody planned that. It happened because one person was willing. That concentration is a risk to the organization, and to the treasurer too: when money goes missing, the person who did everything has no way to show it was not them.

### Volunteers rotate

Volunteers come and go. A counting procedure that worked under one coordinator fades when the next one never learns it. Bank signers and online users from three treasurers ago may still have access, because nobody told the bank they left.

### Board members avoid the numbers

Board members join for the mission. Many feel unqualified to question the finances, so the monthly report gets a nod. A board that never asks to see a bank statement gives the treasurer no backstop.

### Cash and checks at events

Events, collections and sales bring in cash in irregular amounts with no invoice behind them. Without a count at the point of collection, there is no figure to check the deposit against.

## Two-person counts for nonprofit cash and checks

A two-person count means two volunteers, not related to each other, open, count and record every collection together, then sign a count sheet before the money leaves their joint custody. One copy of the sheet goes with the deposit and one goes to the bookkeeper, so the recorded amount and the bank amount can later be compared.

### Steps for each count

1. **Two people open the collection together.** That includes the mail, the event cash box or the donation envelopes.
2. **List every check** by donor, check number and amount, and count currency by denomination.
3. **Both counters sign and date the count sheet.** Neither leaves with the money alone.
4. **Prepare the deposit** and seal it in a bank bag, or deposit it straight away.
5. **Give a copy of the count sheet to the bookkeeper**, who records gifts from the sheet, not from the deposit slip.
6. **Someone outside the count compares the sheet with the bank credit** when the statement arrives.

Faith communities have their own version of this routine around weekly offerings, with rotating teams and offering envelopes. [Church offering counting procedures](/blog/church-offering-counting-procedures) walks through it in detail.

### Event cash

At a fundraiser, issue each cash box with a starting float recorded on a sheet, count it with two people at the end and record the difference as the take. [Cash handling procedures for registers and tills](/blog/cash-handling-procedures) covers floats, drops and end-of-shift counts that adapt well to event tables.

### Donor acknowledgments as a second check

Donors often need a receipt. The IRS page on [written acknowledgments for charitable contributions](https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contributions-written-acknowledgments) says a donor substantiating a gift of $250 or more needs a written acknowledgment that gives the organization's name, the amount of cash contributed and whether any goods or services were given in return. When acknowledgments are sent by someone other than the counters, each donor who gets a letter becomes an outside check: a donor whose gift was never recorded will ask why the letter is missing or wrong.

## Nonprofit disbursement approval with a volunteer treasurer

Every nonprofit payment should be approved by someone other than the person who pays it. With a volunteer treasurer, that usually means the treasurer prepares payments and a second officer, such as the board chair, approves each one against an invoice before it is released. Payments to the treasurer, including reimbursements, need approval from someone else entirely.

### Set approval limits

The board should adopt written limits: for example, the treasurer may pay routine bills under a set amount once a second officer approves, while anything larger or outside the budget needs a board vote. Record the limits in the minutes so they survive a change of officers.

### Two signers, real review

Many small nonprofits require two signatures on checks. That works only if the second signer looks at the invoice. A second signer who signs blank checks in advance, or signs a stack without reading, adds nothing. Online payments make this easier: the treasurer sets up the payment and the second officer approves it in the bank's system after seeing the support.

### Reimbursements and related parties

Board members and volunteers often buy supplies and ask to be repaid. Require receipts, have someone other than the claimant approve, and watch for payments to businesses owned by board members or their families. Those may be fine, but they should be disclosed and approved. [Spotting related-party transactions in bank statements](/blog/related-party-transactions-in-bank-statements) explains what those payments look like on a statement and how to trace them.

### Cards and online subscriptions

A debit card on the main account lets anyone holding it spend without approval. Prefer a credit card with a low limit, issued to a named person, with receipts attached to each monthly statement and a second person reviewing it.

## Board oversight of the nonprofit bank statements

The board, or a finance committee member who is not a signer and not the treasurer, should receive the bank statements directly each month and compare them with the treasurer's report. Statements sent straight from the bank to that reviewer cannot be edited first. A short, regular look does more than an annual deep dive.

### What the reviewer looks at

- The ending balance on the statement matches the treasurer's report.
- Deposits look about the right size for the month's events and appeals.
- Payees are familiar, with no payments to individuals that nobody can explain.
- Check numbers run in sequence and images show the expected signers.
- Transfers between accounts net to zero across the organization's accounts.

### An example monthly board cash packet

The checklist below is an example of what the treasurer hands the reviewer each month. Amounts are made up.

| Item | Prepared by | Reviewed by | Example for March |
| --- | --- | --- | --- |
| Bank statements for every account, sent direct from the bank | Bank | Finance committee member | Checking 4,210.33; savings 18,502.10 |
| Bank reconciliation for each account, signed | Treasurer | Finance committee member | No unexplained differences |
| Count sheets for every deposit | Counters | Bookkeeper | 9 sheets, totals agree to 9 bank credits |
| List of payments with approvals | Treasurer | Board chair | 14 payments, all approved before release |
| Restricted gift roll-forward | Bookkeeper | Finance committee member | See next section |

### Ask one question every month

The reviewer should ask at least one specific question each month, such as "what was the $600 to the hardware store?" The answer is usually ordinary. The habit tells everyone the statements are read.

## Tracking restricted gifts from the gift record to the bank

A restricted gift is money a donor gives for a stated purpose or period, such as a building fund or a scholarship, and it may be spent only for that purpose. Tracking it means recording each gift and each spend against its fund, then showing at month end that cash covers the unspent balance.

### Record the restriction when the gift arrives

The count sheet or gift record should note any restriction the donor wrote on the envelope, letter or online form. The bookkeeper records the gift to a restricted fund, not to general income. Keep the donor's written restriction with the record.

### Spend against the restriction

When the organization pays for something the restricted gift covers, record the payment against that fund too. Board approval should mention the fund, so the minutes show the restriction was considered.

### Prove the cash is there

Restricted money usually sits in the same bank account as everything else. That is allowed in many cases, but the organization should be able to show the unspent restricted balance is covered by cash. A simple roll-forward does it.

| Fund | Opening balance | Gifts received | Spent | Closing balance |
| --- | --- | --- | --- | --- |
| Roof repair (example) | 12,000.00 | 1,500.00 | 4,800.00 | 8,700.00 |
| Youth scholarships (example) | 3,250.00 | 0.00 | 1,000.00 | 2,250.00 |
| Total restricted | 15,250.00 | 1,500.00 | 5,800.00 | 10,950.00 |

In this example, total cash across the organization's accounts is 22,712.43, so restricted funds of 10,950.00 are covered. If total cash ever falls below the restricted total, general operations have been spending restricted money, and the board needs to know.

### Separate accounts for large funds

A large, long-lived restricted fund, such as a capital campaign, is easier to track in its own bank account. The statement then shows the fund's cash directly, and any transfer out of it stands out.

## What should a nonprofit do when it cannot separate cash duties?

When one volunteer has to do most of the treasury work, add review in place of separation. Send bank statements directly to a second person, require a second approver for every online payment, and arrange an independent review of the books each year. These steps do not stop every problem, but they make concealment much harder.

### Compensating controls for a one-person treasury

- **Statements to someone else.** Online statement access for a board member who is not a signer, or paper statements mailed to their address.
- **Second approval in the bank.** Many business online banking services can require a second user to approve payments. That works even when the treasurer prepares everything.
- **Counting by others.** Even if the treasurer deposits, two other volunteers can count first.
- **Annual independent review.** An outside accountant, or a board member with finance experience, reconciles a few months from the statements without the treasurer's help.
- **Rotation.** Plan treasurer terms so the books change hands every few years. A new treasurer reading old records is a review in itself.

### Make review fast enough to happen

Volunteers will not keep doing a review that takes a whole evening. Bank statements read into a structured file, checked to foot and matched to the books, take much of the manual effort away. [PreciseBankFlow](/) does that kind of footing and matching and lists each gap or possible duplicate, which lets a volunteer reviewer spend their time on the questions instead of the arithmetic.